Item 1. Financial Statements
Item 1.
Financial statements
Consolidated statement of income (U.S. GAAP, unaudited)
Six Months
Second Quarter
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Revenues and other income
Revenues (a)
3,666
9,228
10,330
17,193
Investment and other income (note 4)
44
33
70
50
Total revenues and other income
3,710
9,261
10,400
17,243
Expenses
Exploration
3
5
4
38
Purchases of crude oil and products (b) (note 13)
2,115
5,662
6,341
10,557
Production and manufacturing (c)
1,273
1,715
2,852
3,310
Selling and general (c)
183
236
349
449
Federal excise tax and fuel charge
369
463
820
857
Depreciation and depletion (note 13)
413
392
886
782
Non-service
pension and postretirement benefit
30
36
60
72
Financing (d) (note 7)
17
23
36
51
Total expenses
4,403
8,532
11,348
16,116
Income (loss) before income taxes
( 693
)
729
( 948
)
1,127
Income taxes
( 167
)
( 483
)
( 234
)
( 378
)
Net income (loss)
( 526
)
1,212
( 714
)
1,505
Per share information (Canadian dollars)
Net income (loss) per common share - basic (note 11)
( 0.72
)
1.58
( 0.97
)
1.95
Net income (loss) per common share - diluted (note 11)
( 0.72
)
1.57
( 0.97
)
1.94
(a) Amounts from related parties included in revenues.
747
2,234
2,483
3,956
(b) Amounts to related parties included in purchases of crude oil and products.
396
908
1,135
1,636
(c) Amounts to related parties included in production and manufacturing, and selling and general expenses.
138
161
321
322
(d) Amounts to related parties included in financing, (note 7).
14
24
38
52
The information in the notes to consolidated financial statements is an integral part of these statements.
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IMPERIAL OIL LIMITED
Consolidated statement of comprehensive income (U.S. GAAP, unaudited)
Six Months
Second Quarter
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Net income (loss)
( 526
)
1,212
( 714
)
1,505
Other comprehensive income (loss), net of income taxes
Postretirement benefits liability adjustment (excluding amortization)
-
-
( 114
)
18
Amortization of postretirement benefits liability adjustment included in net periodic benefit costs
34
28
68
55
Total other comprehensive income (loss)
34
28
( 46
)
73
Comprehensive income (loss)
( 492
)
1,240
( 760
)
1,578
The information in the notes to consolidated financial statements is an integral part of these statements.
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IMPERIAL OIL LIMITED
Consolidated balance sheet (U.S. GAAP, unaudited)
As at
June 30
As at
Dec 31
millions of Canadian dollars
2020
2019
Assets
Current assets
Cash
233
1,718
Accounts receivable, less estimated doubtful accounts (a) (note 5)
1,866
2,699
Inventories of crude oil and products (note 13)
1,253
1,296
Materials, supplies and prepaid expenses
741
616
Total current assets
4,093
6,329
Investments and long-term receivables (b) (note 5)
882
891
Property, plant and equipment,
55,358
54,868
less accumulated depreciation and depletion
( 21,497
)
( 20,665
)
Property, plant and equipment, net
33,861
34,203
Goodwill (note 13)
166
186
Other assets, including intangibles, net
498
578
Total assets
39,500
42,187
Liabilities
Current liabilities
Notes and loans payable (c)
228
229
Accounts payable and accrued liabilities (a) (note 9)
3,176
4,260
Income taxes payable
-
106
Total current liabilities
3,404
4,595
Long-term debt (d) (note 8)
4,965
4,961
Other long-term obligations (note 9)
3,753
3,637
Deferred income tax liabilities
4,462
4,718
Total liabilities
16,584
17,911
Shareholders’ equity
Common shares at stated value (e) (note 11)
1,357
1,375
Earnings reinvested
23,516
24,812
Accumulated other comprehensive income (loss) (note 12)
( 1,957
)
( 1,911
)
Total shareholders’ equity
22,916
24,276
Total liabilities and shareholders’ equity
39,500
42,187
(a)
Accounts receivable, less estimated doubtful accounts included net amounts receivable from related parties of $ 317 million (2019 - $ 1,007 million).
(b)
Investments and long-term receivables included amounts from related parties of $ 311 million (2019 - $ 296 million).
(c)
Notes and loans payable included amounts to related parties of $ 111 million (2019 - $ 111 million).
(d)
Long-term debt included amounts to related parties of $ 4,447 million (2019 - $ 4,447 million).
(e)
Number of common shares authorized and outstanding were 1,100 million and 734 million, respectively (2019 - 1,100 million and 744 million, respectively).
The information in the notes to consolidated financial statements is an integral part of these statements.
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Consolidated statement of shareholders’ equity (U.S. GAAP, unaudited)
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Common shares at stated value
(note 11)
At beginning of period
1,357
1,427
1,375
1,446
Share purchases at stated value
-
( 17
)
( 18
)
( 36
)
At end of period
1,357
1,410
1,357
1,410
Earnings reinvested
At beginning of period
24,204
24,364
24,812
24,560
Net income (loss) for the period
( 526
)
1,212
( 714
)
1,505
Share purchases in excess of stated value
-
( 351
)
( 256
)
( 693
)
Dividends declared
( 162
)
( 169
)
( 324
)
( 316
)
Cumulative effect of accounting change (note 5)
-
-
( 2
)
-
At end of period
23,516
25,056
23,516
25,056
Accumulated other comprehensive income (loss)
(note 12)
At beginning of period
( 1,991
)
( 1,472
)
( 1,911
)
( 1,517
)
Other comprehensive income (loss)
34
28
( 46
)
73
At end of period
( 1,957
)
( 1,444
)
( 1,957
)
( 1,444
)
Shareholders’ equity at end of period
22,916
25,022
22,916
25,022
The information in the notes to consolidated financial statements is an integral part of these statements.
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IMPERIAL OIL LIMITED
Consolidated statement of cash flows (U.S. GAAP, unaudited)
Inflow (outflow)
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Operating activities
Net income (loss)
( 526
)
1,212
( 714
)
1,505
Adjustments for non-cash
items:
Depreciation and depletion
413
392
866
782
Impairment of intangible assets (note 13)
-
-
20
-
(Gain) loss on asset sales (note 4)
( 10
)
( 11
)
( 17
)
( 6
)
Inventory write-down to current market value (note 13)
( 281
)
-
-
-
Deferred income taxes and other
( 242
)
( 471
)
( 199
)
( 475
)
Changes in operating assets and liabilities:
Accounts receivable
( 310
)
99
833
( 605
)
Inventories, materials, supplies and prepaid expenses
117
( 40
)
( 82
)
( 21
)
Income taxes payable
( 2
)
( 9
)
( 106
)
( 37
)
Accounts payable and accrued liabilities
( 46
)
( 175
)
( 1,074
)
728
All other items - net (b)
71
29
80
158
Cash flows from (used in) operating activities
( 816
)
1,026
( 393
)
2,029
Investing activities
Additions to property, plant and equipment
( 205
)
( 394
)
( 515
)
( 825
)
Proceeds from asset sales (note 4)
40
14
49
36
Loans to equity companies - net
( 7
)
( 49
)
( 14
)
( 103
)
Cash flows from (used in) investing activities
( 172
)
( 429
)
( 480
)
( 892
)
Financing activities
Reduction in finance lease obligations (note 8)
( 5
)
( 6
)
( 12
)
( 13
)
Dividends paid
( 162
)
( 147
)
( 326
)
( 296
)
Common shares purchased (note 11)
-
( 368
)
( 274
)
( 729
)
Cash flows from (used in) financing activities
( 167
)
( 521
)
( 612
)
( 1,038
)
Increase (decrease) in cash
( 1,155
)
76
( 1,485
)
99
Cash at beginning of period
1,388
1,011
1,718
988
Cash at end of period
(a)
233
1,087
233
1,087
(a) Cash is composed of cash in bank and cash equivalents at cost. Cash equivalents are all highly liquid securities with maturity of three months or less when purchased.
(b) Included contributions to registered pension plans.
( 41
)
( 57
)
( 100
)
( 98
)
Income taxes (paid) refunded.
1
23
( 152
)
46
Interest (paid), net of capitalization.
( 17
)
( 23
)
( 36
)
( 51
)
The information in the notes to consolidated financial statements is an integral part of these statements.
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IMPERIAL OIL LIMITED
Notes to consolidated financial statements (unaudited)
1. Basis of financial statement preparation
These unaudited consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) and follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual consolidated financial statements filed with the U.S. Securities and Exchange Commission (SEC) in the company’s 2019 annual report on Form 10-K.
In the opinion of the company, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature.
The company’s exploration and production activities are accounted for under the “successful efforts” method.
The results for the six months ended June 30, 2020, are not necessarily indicative of the operations to be expected for the full year.
All amounts are in Canadian dollars unless otherwise indicated.
2. Accounting changes
Effective January 1, 2020, Imperial adopted the Financial Accounting Standards Board’s update, Financial Instruments—Credit Losses (Topic 326)
, as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote and considers past events, current conditions and expectations of the future. The standard did not have a material impact on the company’s financial statements.
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IMPERIAL OIL LIMITED
3. Business segments
Second Quarter
Upstream
Downstream
Chemical
millions of Canadian dollars
2020
2019
2020
2019
2020
2019
Revenues and other income
Revenues (a)
908
2,587
2,587
6,375
171
266
Intersegment sales
262
1,116
124
487
27
48
Investment and other income (note 4)
10
4
27
19
1
-
1,180
3,707
2,738
6,881
199
314
Expenses
Exploration
3
5
-
-
-
-
Purchases of crude oil and products (note 13)
512
1,802
1,896
5,338
119
171
Production and manufacturing
884
1,171
343
474
46
70
Selling and general
-
-
135
201
21
23
Federal excise tax and fuel charge
-
-
369
463
-
-
Depreciation and depletion (note 13)
363
338
40
46
4
3
Non-service
pension and postretirement benefit
-
-
-
-
-
-
Financing (note 7)
-
-
-
-
-
-
Total expenses
1,762
3,316
2,783
6,522
190
267
Income (loss) before income taxes
( 582 )
391
( 45 )
359
9
47
Income taxes
( 138 )
( 594 )
( 13 )
101
2
9
Net income (loss)
( 444 )
985
( 32 )
258
7
38
Cash flows from (used in) operating activities
( 968 )
585
88
423
46
52
Capital and exploration expenditures
(b)
145
301
51
111
2
6
Second Quarter
Corporate and other
Eliminations
Consolidated
millions of Canadian dollars
2020
2019
2020
2019
2020
2019
Revenues and other income
Revenues (a)
-
-
-
-
3,666
9,228
Intersegment sales
-
-
( 413 )
( 1,651 )
-
-
Investment and other income (note 4)
6
10
-
-
44
33
6
10
( 413 )
( 1,651 )
3,710
9,261
Expenses
Exploration
-
-
-
-
3
5
Purchases of crude oil and products (note 13)
-
-
( 412 )
( 1,649 )
2,115
5,662
Production and manufacturing
-
-
-
-
1,273
1,715
Selling and general
28
14
( 1 )
( 2 )
183
236
Federal excise tax and fuel charge
-
-
-
-
369
463
Depreciation and depletion (note 13)
6
5
-
-
413
392
Non-service
pension and postretirement
benefit
30
36
-
-
30
36
Financing (note 7)
17
23
-
-
17
23
Total expenses
81
78
( 413 )
( 1,651 )
4,403
8,532
Income (loss) before income taxes
( 75 )
( 68 )
-
-
( 693 )
729
Income taxes
( 18 )
1
-
-
( 167 )
( 483 )
Net income (loss)
( 57 )
( 69 )
-
-
( 526 )
1,212
Cash flows from (used in) operating activities
1
( 34 )
17
-
( 816 )
1,026
Capital and exploration expenditures
(b)
9
11
-
-
207
429
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(a)
Included export sales to the United States of $ 739 million (2019 - $ 2,152 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.
(b)
Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.
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IMPERIAL OIL LIMITED
Six Months to June 30
Upstream
Downstream
Chemical
millions of Canadian dollars
2020
2019
2020
2019
2020
2019
Revenues and other income
Revenues (a)
2,560
4,827
7,383
11,849
387
517
Intersegment sales
984
2,064
692
935
71
120
Investment and other income (note 4)
10
4
42
29
1
-
3,554
6,895
8,117
12,813
459
637
Expenses
Exploration
4
38
-
-
-
-
Purchases of crude oil and products (note 13)
2,162
3,388
5,665
9,920
259
364
Production and manufacturing
1,992
2,327
751
855
109
128
Selling and general
-
-
316
380
46
44
Federal excise tax and fuel charge
-
-
820
857
-
-
Depreciation and depletion (note 13)
780
672
86
92
8
7
Non-service
pension and postretirement
benefit
-
-
-
-
-
-
Financing (note 7)
-
-
-
-
-
-
Total expenses
4,938
6,425
7,638
12,104
422
543
Income (loss) before income taxes
( 1,384 )
470
479
709
37
94
Income tax expense (benefit)
( 332 )
( 573 )
109
194
9
22
Net income (loss)
( 1,052 )
1,043
370
515
28
72
Cash flows from (used in) operating activities
( 504 )
865
110
1,155
43
100
Capital and exploration expenditures
(b)
376
673
127
240
11
23
Total assets as at June 30 (note 13)
33,591
35,059
4,683
5,041
404
451
Six Months to June 30
Corporate and other
Eliminations
Consolidated
millions of Canadian dollars
2020
2019
2020
2019
2020
2019
Revenues and other income
Revenues (a)
-
-
-
-
10,330
17,193
Intersegment sales
-
-
( 1,747 )
( 3,119 )
-
-
Investment and other income (note 4)
17
17
-
-
70
50
17
17
( 1,747 )
( 3,119 )
10,400
17,243
Expenses
Exploration
-
-
-
-
4
38
Purchases of crude oil and products (note 13)
-
-
( 1,745 )
( 3,115 )
6,341
10,557
Production and manufacturing
-
-
-
-
2,852
3,310
Selling and general
( 11 )
29
( 2 )
( 4 )
349
449
Federal excise tax and fuel charge
-
-
-
-
820
857
Depreciation and depletion (note 13)
12
11
-
-
886
782
Non-service
pension and postretirement benefit
60
72
-
-
60
72
Financing (note 7)
36
51
-
-
36
51
Total expenses
97
163
( 1,747 )
( 3,119 )
11,348
16,116
Income (loss) before income taxes
( 80 )
( 146 )
-
-
( 948 )
1,127
Income tax expense (benefit)
( 20 )
( 21 )
-
-
( 234 )
( 378 )
Net income (loss)
( 60 )
( 125 )
-
-
( 714 )
1,505
Cash flows from (used in) operating activities
( 42 )
( 91 )
-
-
( 393 )
2,029
Capital and exploration expenditures
(b
)
24
22
-
-
538
958
Total assets as at June 30
(note 13)
1,088
1,822
( 266 )
( 444 )
39,500
41,929
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(a)
Included export sales to the United States of $ 2,112 million (2019—$ 3,816 million). Export sales to the United States were recorded in all operating segments, with the largest effects in the Upstream segment.
(b)
Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant and equipment, additions to finance leases, additional investments and acquisitions. CAPEX excludes the purchase of carbon emission credits.
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4. Investment and other income
Investment and other income included gains and losses on asset sales as follows:
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Proceeds from asset sales
40
14
49
36
Book value of asset sales
30
3
32
30
Gain (loss) on asset sales, before tax
10
11
17
6
Gain (loss) on asset sales, after tax
9
10
15
6
5. Allowance for current expected credit loss (CECL)
Effective January 1, 2020, the company adopted the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326),
as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. The standard requires this expected loss methodology for trade receivables, certain other financial assets and off-balance-sheet
credit exposures. The cumulative effect adjustment related to the adoption of this standard reduced “Earnings reinvested” in Shareholders’ equity by $ 2 million.
The company is exposed to credit losses primarily through sales of petroleum products, crude oil, natural gas liquids and natural gas, as well as loans to equity companies and joint venture receivables. A counterparty’s ability to pay is assessed through a credit review process that considers payment terms, the counterparty’s established credit rating or the company’s assessment of the counterparty’s credit worthiness, contract terms, and other risks. The company can require prepayment or collateral to mitigate certain credit risks.
The company groups financial assets into portfolios that share similar risk characteristics for purposes of determining the allowance for credit losses. Each reporting period, the company assesses whether a significant change in credit loss or risk has occurred. Among the quantitative and qualitative factors considered are historical financial data, current conditions, industry and country risk, current credit ratings and the quality of third-party guarantees secured from the counterparty. Financial assets are written off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recognized in earnings. The company manages receivable portfolios using past due balances as a key credit quality indicator.
The company recognizes a credit allowance for off-balance-sheet
credit exposures as a liability on the balance sheet, separate from the allowance for credit losses related to recognized financial assets. These exposures could include unfunded loans to equity companies and financial guarantees that cannot be cancelled unilaterally by the company.
During the first half of 2020, the COVID-19 pandemic spread rapidly through most areas of the world resulting in economic uncertainty, global financial market volatility, and negative effects in the credit markets. The company has considered these effects, along with the significantly lower balances of trade receivables at the end of the quarter, in its estimate of credit losses and concluded no material adjustment to credit allowances in the quarter was required. At June 30, 2020, the company’s evaluation of financial assets under Financial Instruments – Credit Losses (Topic 326)
, as amended included $ 1,420 million of accounts receivable, net of allowances of $ 4 million, and investments and long-term receivables of $ 326 million. The company has determined that, at this time, no credit allowance is required for investments and long-term receivables. There is currently no off-balance-sheet
credit exposure.
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IMPERIAL OIL LIMITED
6. Employee retirement benefits
The components of net benefit cost were as follows:
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Pension benefits:
Current service cost
77
57
153
114
Interest cost
77
81
154
162
Expected return on plan assets
( 98
)
( 88
)
( 196
)
( 175
)
Amortization of prior service cost
3
-
7
-
Amortization of actuarial loss (gain)
39
38
77
75
Net periodic benefit cost
98
88
195
176
Other postretirement benefits:
Current service cost
6
4
12
8
Interest cost
6
6
12
11
Amortization of actuarial loss (gain)
3
( 1
)
6
( 1
)
Net periodic benefit cost
15
9
30
18
7. Financing costs
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Debt-related interest
26
34
60
73
Capitalized interest
( 9
)
( 11
)
( 24
)
( 22
)
Net interest expense
17
23
36
51
Other interest
-
-
-
-
Total financing
17
23
36
51
During the second
quarter of 2020, in addition to existing credit facilities of $ 500 million, the company entered into a $ 500 million committed short-term line of credit to May 2021, and a $ 300 million committed short-term line of credit to June 2021. The company has not drawn on any of its credit facilities.
8. Long-term debt
As at
June 30
As at
Dec 31
millions of Canadian dollars
2020
2019
Long-term debt
4,447
4,447
Finance leases
518
514
Total long-term debt
4,965
4,961
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IMPERIAL OIL LIMITED
9. Other long-term obligations
As at
June 30
As at
Dec 31
millions of Canadian dollars
2020
2019
Employee retirement benefits (a)
1,977
1,822
Asset retirement obligations and other environmental liabilities (b)
1,384
1,388
Share-based incentive compensation liabilities
54
65
Operating lease liability (c)
107
143
Other obligations
231
219
Total other long-term obligations
3,753
3,637
(a)
Total recorded employee retirement benefits obligations also included $ 58 million in current liabilities (2019 - $ 58 million).
(b)
Total asset retirement obligations and other environmental liabilities also included $ 124 million in current liabilities (2019 - $ 124 million).
(c)
Total operating lease liability also included $ 106 million in current liabilities (2019 - $ 115 million). In addition to the total operating lease liability, additional undiscounted commitments for leases not yet commenced totalled $ 27 million (2019 - $ 6 million).
10. Financial and derivative instruments
Financial instruments
The fair value of the company’s financial instruments is determined by reference to various market data and other appropriate valuation techniques. There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value. At June 30, 2020 and December 31, 2019 the fair value of long-term debt ($ 4,447 million, excluding finance lease obligations) was primarily a level 2 measurement.
Derivative instruments
The company’s size, strong capital structure and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the company’s enterprise-wide risk from changes in commodity prices and currency exchange rates. In addition, the company uses commodity-based contracts, including derivative instruments to manage commodity price risk. The company does not designate derivative instruments as a hedge for hedge accounting purposes.
Credit risk associated with the company’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.
At June 30, 2020, the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $ 27 million, gross liabilities of $ 74 million and collateral receivable of $ 70 million, with the net effects reflected in “Accounts receivable, less estimated doubtful accounts” on the Consolidated balance sheet. At December 31, 2019 the carrying values of derivative instruments on the Consolidated balance sheet were gross assets of $ 0 million, gross liabilities of $ 2 million and collateral receivable of $ 6 million.
At June 30, 2020, the net notional forward long / (short) position of derivative instruments was ( 1,920,000 ) barrels for crude and ( 240,000 ) barrels for products. At December 31, 2019, the net notional forward long / (short) position of derivative instruments was ( 590,000 ) barrels for crude and 0 barrels for products.
Realized and unrealized gain or (loss) on derivative instruments recognized on the Consolidated statement of income is included in the following lines on a before-tax
basis:
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Revenues
( 9
)
-
( 8
)
( 2
)
Purchases of crude oil and products
( 52
)
-
( 18
)
( 6
)
Total
( 61
)
-
( 26
)
( 8
)
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IMPERIAL OIL LIMITED
11. Common shares
As of
June 30
As of
Dec 31
thousands of shares
2020
2019
Authorized
1,100,000
1,100,000
Common shares outstanding
734,077
743,902
The 12 -month
normal course issuer bid program that was in place during the second quarter of 2020, came into effect on June 27, 2019. The program enabled the company to purchase up to a maximum of 38,211,086 common shares ( 5 percent of the total shares on June 13, 2019), which included shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. Exxon Mobil Corporation participated to maintain its ownership percentage at approximately 69.6 percent. The program ended on June 26, 2020, and purchases under this program were suspended on April 1, 2020. Upon expiration, the company had purchased 28,697,514 shares under the program.
The current 12-month
limited normal course issuer bid program came into effect on June 29, 2020 and is used primarily to eliminate dilution from shares issued in conjunction with Imperial’s restricted stock unit plan. The program enables the company to purchase up to a maximum of 50,000 common shares, which includes shares purchased under the normal course issuer bid and from Exxon Mobil Corporation concurrent with, but outside of the normal course issuer bid. As in the past, Exxon Mobil Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent.
The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of earnings reinvested.
The company’s common share activities are summarized below:
Thousands
of shares
Millions
of dollars
Balance as at December 31, 2018
782,565
1,446
Issued under employee share-based awards
1
-
Purchases at stated value
( 38,664
)
( 71
)
Balance as at December 31, 2019
743,902
1,375
Issued under employee share-based awards
-
-
Purchases at stated value
( 9,825
)
( 18
)
Balance as at June 30, 2020
734,077
1,357
The following table provides the calculation of basic and diluted earnings per common share and the dividends declared by the company on its outstanding common shares:
Six Months
Second Quarter
to June 30
2020
2019
2020
2019
Net income (loss) per common share - basic
Net income (loss)
(millions of Canadian dollars)
( 526
)
1,212
( 714
)
1,505
Weighted average number of common shares outstanding
(millions of shares)
734.1
767.4
736.5
772.5
Net income (loss) per common share
(dollars)
( 0.72
)
1.58
( 0.97
)
1.95
Net income (loss) per common share - diluted
Net income (loss)
(millions of Canadian dollars)
( 526
)
1,212
( 714
)
1,505
Weighted average number of common shares outstanding
(millions of shares)
734.1
767.4
736.5
772.5
Effect of employee share-based awards
(millions of shares) (a)
-
2.5
-
2.4
Weighted average number of common shares outstanding, assuming dilution
(millions of shares)
734.1
769.9
736.5
774.9
Net income (loss) per common share
(dollars)
( 0.72
)
1.57
( 0.97
)
1.94
Dividends per common share - declared
(dollars)
0.22
0.22
0.44
0.41
(a)
For Second Quarter 2020 and Six Months to June 30, 2020, the Net income (loss) per common share – diluted excludes the effect of 2.0 million employee share-based awards. Share-based awards have the potential to dilute basic earnings per share in the future.
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IMPERIAL OIL LIMITED
12. Other comprehensive income (loss) information
Changes in accumulated other comprehensive income (loss):
millions of Canadian dollars
2020
2019
Balance at January 1
( 1,911
)
( 1,517
)
Postretirement benefits liability adjustment:
Current period change excluding amounts reclassified from accumulated other comprehensive income
( 114
)
18
Amounts reclassified from accumulated other comprehensive income
68
55
Balance at June 30
( 1,957
)
( 1,444
)
Amounts reclassified out of accumulated other comprehensive income (loss) - before-tax
income (expense):
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost (a)
( 45
)
( 37
)
( 90
)
( 74
)
(a) This accumulated other comprehensive income component is included in the computation of net periodic benefit cost, (note 6).
Income tax expense (credit) for components of other comprehensive income (loss):
Second Quarter
Six Months
to June 30
millions of Canadian dollars
2020
2019
2020
2019
Postretirement benefits liability adjustments:
Postretirement benefits liability adjustment (excluding amortization)
-
-
( 37
)
7
Amortization of postretirement benefits liability adjustment included in net periodic benefit cost
11
9
22
19
Total
11
9
( 15
)
26
13. Miscellaneous financial information
Crude oil and product inventories are carried at the lower of current market value or cost, determined under the last-in,
first-out
method (LIFO). In the first quarter of 2020, a non-cash
charge of $ 281 million after-tax
was recorded associated with the carrying value of crude oil inventory exceeding the current market value. In the second quarter of 2020, the first quarter’s temporary non-cash
inventory charge was reversed. The inventory balance will continue to be re-evaluated
at the end of each quarter. At year-end,
any adjustment to the carrying value is considered a permanent adjustment.
As disclosed in Imperial’s 2019 Form 10-K,
goodwill is tested for impairment annually or more frequently if events or circumstances indicate it might be impaired. In the first quarter of 2020, with the change in economic conditions and the reduction in the company’s market capitalization, the company assessed its goodwill balances for impairment and recognized a non-cash
goodwill impairment charge of $ 20 million in the company’s Upstream segment. The goodwill impairment is reflected in “Depreciation and depletion” on the Consolidated statement of income and “Goodwill” on the Consolidated balance sheet. The remaining balance of goodwill is associated with the Downstream segment.
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IMPERIAL OIL LIMITED
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.